The transaction involved subsidiaries of CSIC Leasing acquiring four secondhand LR product tankers from subsidiaries of Eletson, with the sale proceeds being used to refinance the balloon payment under certain loan facilities of the Eletson group secured on the vessels.
The vessels were then leased back on delivery to Eletson under agreed financial lease arrangements. Additionally, CSIC Leasing provided, through one of its affiliated companies, a working capital loan to Eletson as part of the refinancing process.
The Hong Kong maritime team of international law firm Watson Farley & Williams (WFW) advised on the deal.
WFW pointed out that this is CSIC Leasing’s first-ever lease financing transaction and a milestone for them in expanding their shipping portfolio and establishing long term relationships with key players in the industry, with a view to boost the activities of CSIC’s shipbuilding arm.
It is also an important transaction for Eletson, according to WFW, as it demonstrates that seeking finance from Asian sources is now a norm for western shipowners.
“This is a landmark transaction because it shows how a PRC lessor affiliated to a state-owned shipbuilding giant, is able to structure complex financial packages enabling reputable shipowners across the globe to refinance their existing debt whilst at the same time securing its own long term interests,” commented Christoforos Bisbikos, partner of WFW.